Kmart takes measure of Rockford

Friday

Oct 26, 2007 at 12:01 AMOct 26, 2007 at 6:37 PM

When Rockford talks, Kmart intends to listen – very closely. The retailer has chosen Rockford’s two Kmart stores – at 5909 E. State St. and 1321 Sandy Hollow Road – as the nation’s first publicly announced testing grounds for its push to be more customer-driven.

Deborah Austin

When Rockford talks, Kmart intends to listen – very closely.

The retailer has chosen Rockford’s two Kmart stores – at 5909 E. State St. and 1321 Sandy Hollow Road — as the nation’s first publicly announced testing grounds for its push to become more customer-driven, a key force in companywide strategy to boost profitability.

Rockford is “the testing ground for what will resonate for our customers around the Kmart brand – not what we think about the customer but what we really get firsthand,” said Steve Sunderland, vice president for store initiatives for Sears Holdings. “If something isn’t working, we will try and make it better.”

The customer-driven mandate comes straight from the top.

Edward S. Lampert, chairman of Kmart’s parent company Sears Holdings Corp. pushed the message this spring as a way to improve profitability.

“We need to listen to our customers, to learn what they want to buy, how and where they want to buy it, and the different ways they prefer to be served. We have to become responsive to the needs and wants we uncover.”

That is the current mission in the Rockford stores, with a flurry of around-the-clock remodeling, restocking and retraining paving the way. New store interiors should be complete by the weekend of Nov. 3; exterior work will take at least three months and is focused mostly on the State Street location.

Why Rockford?

The area has a good mix of what Kmart has identified as “core customer segments,” said Sunderland: “Not just demographics, but segments who care about being with family during the course of the shopping experience, segments looking for value needs, for entertainment value, who want to enjoy the experience in a sensory way.”

A smaller metro market such as Rockford is “low-risk” for a large retailer “because it will not affect their activities in a larger more important market,” said Tom Anderson, managing partner for Anderson Analytics LLC, a market research and business intelligence firm based in Stamford, CT. “Yet it is culturally similar enough in some key ways that products and concepts that will do well there are also likely to do well in the larger mainstream market of the US... Kmart will not only learn how well it is received, but if it is well received it will also learn ways it can further tweak and improve the concept before a larger rollout is considered.”

Longtime Kmart customer Rebecca Burick said she liked most of what she heard about the changes.

“I think it’s marvelous; they’re finally moving into the present” with new decor and store layout, said Burick, who was shopping Thursday at the East State Street store with her mother Ruth Burick. “But I will miss the old Kmart because it had more of a small-town atmosphere. I hope the employees will still have that small-town attitude: bright and cheery.”

Kmart is testing other initiatives in other markets, said Larry Costello, director of public relations and communications for Sears Holdings. While the company is not revealing where or what is being tested elsewhere, “what we’re doing in Rockford is very specific to Rockford.”

Kmart will gather customer feedback through exit interviews with shoppers, online customer satisfaction surveys, and even “shop-alongs,” third parties who shop alongside customers and get instant face-to-face feedback. This feedback will help Kmart decide what to keep and what to change in the stores, and it’s all a “work in progress,” emphasized Sunderland.

Besides the obvious physical changes to its Rockford stores, Kmart is training store associates for improved customer service. It’s his number-one focus, said Tom Reynolds, the manager, or “store coach,” at the State Street location.

Associates are taught to walk customers to the merchandise and help them shop; to assist when customers need help shopping online at in-store service centers; and to guide customers through setup, delivery, and home fix-it services, he said.

The stores also will offer a “fix it for me” databank of pre-approved independent contractors if customers need help with repairs of home components such as windows, or with assembling or installing home-related merchandise. A new segment of store employees, called “solutions associates,” was hired in September to be trained in helping customers arrange for these services.

And all “non customer facing” activities such as restocking will now be done at night while the stores are closed, to keep from disrupting shoppers, said Sunderland.

Kmart has weathered years of marketplace turbulence. It filed for Chapter 11 bankruptcy protection in January 2002, emerging from bankruptcy reorganization in 2003.

Today its main competitors include Wal-Mart Stores, Inc. and Target Corp. as well as other discount mass retailers that carry a similar product mix, Sunderland said.

Business reporter Deborah Austin can be reached at 815-987-1341 or daustin@rrstar.com.